The National Australian Bank has decided to delve into the current hot topic of soil carbon. NAB is beginning to encourage its farming customers to be a lot savvier when it comes to accumulating carbon in the soil by providing incentives to growers that are adopting carbon friendly practices. The bank appears to be assessing farmers based on natural capital which includes water, soils and forests all under one banner.
The decision by Mr Horne (agribusiness banker) stemmed from a personal assessment of Australian farmers which concluded that there was a clear correlation between the farmer’s environmental performance and their profitability. With this statement in mind I don’t think I need to point out the benefits Aussie farmers have experienced with their adoption of minimum till practices.
It’s great to see that farmers will be able to receive some additional cream on the cake for adopting practices that will increase the sustainability and profitability of their farming systems. For some more information on NAB’s natural capital goals the article in the Sydney morning herald has summed it up nicely. I have also included a link to NAB’s spin on the topic which included the reasoning behind its natural capital movement.
What is the CFI (Carbon Farming Initiative)
The carbon farming initiative allows farmers and land managers to earn carbon credits for storing soil carbon and reducing animal emissions on the land. These credits can then be sold onto people and businesses that wish to offset their emissions.
The benefits to Australian farmers can be two fold with the recent research proving that soil carbon can be a crucial component of soil health. This allows Australian farmers to get payed for enhancing the sustainability of their farming systems. Below are some examples of how Australian farmers can go about earning carbon credits.
Different credits for different activities: From what I gather there can be two separate types of carbon credits, the Australian carbon credit units and the Kyoto Australian carbon credit units. The Kyoto credits can only be gained before the year of 2012. So this is referring to farmers who planted trees and engaged in carbon strategies prior to 2012. Whether these will be worth more value at this stage I’m unsure but it will be interesting to see as it unfolds.
A key point to make is that the Australian government appears to have farmer productivity in mind when rolling out these carbon credits. An example of this is the government recommending that eroded and unproductive areas of the farm should be the first point of call when it comes to storing carbon credits. It is also recognised within the scheme that soil carbon losses can occur naturally as a result of bushfire, pests and weeds. So a good question to ask prior to the strategy would be if farmers can cultivate to eliminate severe weed infestations.
So it will be interesting to see what kind of value the carbon credits will start to bring and whether or not farmers can utilise the credits as an additional incentive to storing soil carbon.